No. 530.
Mr. Wallace to Mr. Frelinghuysen.

No. 169.]

Sir: If you will be good enough to refer to my dispatch to the Department, No. 98, June 9, 1882, it will be seen that a protest was called for from this legation by a projected regulation of the storage of petroleum in Smyrna. In the same dispatch, as will also be observed, a reference is made to a like scheme for operation in Constantinople. My protest of that date was accordingly drawn to cover the imposition proposed for both cities. A note from the minister of foreign affairs received January 10, 1883, informed me that, the necessary preparations having been made, all ships arriving at Constantinople with petroleum must land their cargoes in the depots built by certain concessionaries of the Government at a place designated.

A year or two ago this regulation would not have been of much importance except to consumers of petroleum, for it was then an American commodity exclusively. The development of the wells of Russia, however, has created a competition which is beginning to make itself felt in this market. The article is vastly inferior; nevertheless, the demand for it grows apace, making the protecting of the interests of dealers in our product a matter of greater care.

The Russians bring their stock here in small vessels via the Black Sea; and, there being a rule which permits the shipper to sell from his ships in limited quantities, their usage is not to land their cargoes. The advantage is obvious. The steamers which bring American petroleum must discharge in bulk, and the dealers pay a storage charge to the owners of the depots. There are no other depots, and a man cannot have a storehouse of his own. Into this particular lodgment he must drop his goods, nolens volens. The Government, of course, gets a dividend from the charges. Its share in Smyrna was to have been 1 per cent.; what it is to be here has not yet been divulged.

Prior to this new regulation petroleum from America was landed at a depot at or near the locality now designated for the purpose. The charge was light, and, admitting the necessity for storage of an article so dangerous outside the city limits, dealers were satisfied. That you may see how the present action of the Government is received by merchants generally, I inclose a communication to me upon the subject. The subscribers, it is to be remarked, are of several nationalities, and they refer in their paper to an expression had in the matter from the chamber of commerce of Constantinople. They all agree that the effect of the order of the Sublime Porte, if it is carried out, will be to double the tax or charge upon the article fixed by our treaty.

Under these circumstances, and with a design to protect our interests as energetically as possible, I sent the Porte a note, of which a copy is herewith transmitted. I followed the communication in person, and had a long interview with his highness the minister of foreign affairs. Indulge a hope that a good effect will be produced. There will at least be a speedy answer.

Trusting my action will meet approval, I will make haste to inform you of the imperial decision when it shall have arrived.

Very respectfully,

[Page 830]
[Inclosure 1 in No. 169.—Circular.]

The depots of petroleum which the concessionaire, Sami Bey, and his partners had undertaken to construct on a piece of ground situated beyond Tchiboukli are now finished.

In future vessels arriving in the port of Constantinople will have to unload their cargoes of petroleum in the depots.

The prefecture of the town has taken the necessary dispositions to this effect.

The ministry of foreign affairs begs the legation of the United States of America to be good enough to inform those of its citizens whom it may concern, so that they on their part may conform with the measure in question.

[Inclosure 2 in No. 169.]

Merchants to Mr. Wallace.

Sir: We, the undersigned, merchants in this city doing business in petroleum, especially with America, have the honor to inform you of the following facts:

Several years ago the Ottoman Government, with wise foresight, established at Pasha Bochtchi a general depot for petroleum, whose warehousing in the city itself would have been dangerous.

We agreed to pay depot dues and to pay also for a guardian which the creation of this depot required, but upon condition that these dues should not exceed the reasonable charges which the prefecture of the city was to make for the protection of the goods which it took charge of.

This situation lasted several years without causing much complaint. Some months ago an influential person of this city, Sami Bey, succeeded in obtaining from the Ottoman Government the concession to work this depot.

Thereupon the useful object that the Government had in view in creating this depot found itself at once changed into a regular speculation, and the dues to be paid to the contractor of this enterprise are nearly doubled.

These dues are so excessive that the chamber of commerce of our city, on being informed of the action of the above-mentioned grantee of the concession, hastened to write to the prefect of the city to state to him, in the most categorical manner, that it considered the new mode of procedure was ruinous to commerce. And, in fact, by the reception of this new tax, at the actual price of petroleum, the import taxes due in virtue of the treaties are simply doubled. In this way the Ottoman Government has in an indirect manner raised the tax of 8 per cent., the only import duty allowed for American products coming into Turkey.

The Ottoman Government, in according this concession, has openly violated the treaties which control the commercial relations of Turkey with foreign countries.

But this is not all. The prefecture of the city, by an abusive application of the above-mentioned concession, intends to subject foreign merchants to the payment of the new tax, even if the latter do not warehouse their merchandise in the new depot, but deliver them directly on the market. The vessels containing petroleum anchor outside the harbor at a place chosen by the prefecture of the city, and the unloading of the merchandise is done in conformity with the prescribed regulations in force.

On the refusal of the merchants to pay this tax, which nothing justifies, the administration of the custom-house refuses to allow the merchandise on board vessels to be unloaded, and exposes them thereby to inevitable injury and enormous demurrage expenses.

We believe it superfluous, Mr. Minister, to enlarge upon the arbitrary character of these regulations, or to show how opposed the claim of the prefect of the city and the administration of the custom-house are to the treaties.

We therefore confine ourselves to note this fact to your excellency, persuaded that you will be good enough to intervene and cause to be respected the diplomatic convention regulating the importation into Turkey of American products.

We have, &c.,

J. W. WHITTOLL & CO., and others.
[Inclosure 3 in No. 169.]

Mr. Wallace to Aarifi Pasha.

No. 142.]

Highness: The note verbale received by this legation from the Sublime Porte January 10, 1883, informs me that ships arriving in the harbor of Constantinople with petroleum must land their cargoes in the depots founded by certain concessionaries of the [Page 831]imperial Government at a place designated. This action, it must he remembered, is decided upon in disregard of the protest which it was my duty to make against it in a former note, No. 113, addressed to his excellency, Said Pasha, minister of foreign affairs, and dated June 7. 1882.

The policy of the Sublime Porte, if persisted in, will be decisive of an intention on its part to justify a series of discriminations conceived and carried out against American productions and manufactures imported into the Ottoman Empire under specific treaty regulations.

The four articles of chief importation from the United States are salted meats, alcohol, petroleum, and cotton goods; and, most extraordinary, of these the first in the order stated is under absolute interdiction, while the second and third are yielding duties in excess of the agreed tariff rates.

To make the inference of purpose on the part of the Sublime Porte more clear, a movement was very recently enforced in the custom-house at Smryna to subject certain cotton goods from the United States to a duty also largely in excess of the existing tariff. Being informed of the action, and of the pretense given out for it, and that it originated here, I sent the dragoman of the legation to the president of the council, in hopes of inducing him to change the order, and so avert the making it a formal diplomatic question. That official replied that he did not recognize our tariff. When asked if his reply was official, he said it was.

Your highness will be good enough to allow me to observe now that this communication is not merely in protest, but to make definite whether the Sublime Porte really means to repudiate the treaty between my Government and that of His imperial Majesty, the Sultan.

I avail, &c.,